Home » Business » CBZ Raises U.S.$100 Million Bond for On Lending

CBZ Bank has to date raised around $100 million through a bond for on lending to productive sectors, chief executive of the bank’s holding company Mr Never Nyemudzo said yesterday. The $100 million is part of the $200 million the bank intends to raise and is backed by the Africa Export and Import Bank. “We have just raised $100 million and we are now working on the second batch,” Mr Nyemudzo told The Herald Business after the group’s annual general meeting.

CBZ raised $68 million through a Diaspora bond in 2012.

Finance director Mr Collins Chimutsa had earlier told the annual general meeting that the bank would continue raising funds to support small to medium enterprises and fund construction of low cost housing.

Mr Nyemudzo said CBZ has earmarked $300 million for construction of low cost houses in the medium term.

“CBZ has been doing land banks since dollarisation and what we want to do now is to unlock the value of the land,” he said.

“We want to build a lot of housing units in line with Zim-Asset and we want the beneficiaries to gain from this Zim-Asset initiative.”

He said the bank has also started negotiations with Government and local authorities for the provision of affordable land.

“Low cost housing is about affordability and if we get cheaper land from local authorities, it means the houses will also be cheaper.

Zimbabwe is faced with a significant housing backlog. The housing shortage is estimated at 1,25 million housing units, which translates to a national backlog of five million citizens or more than 40 percent of total population.

These housing problems resulting from constrained formal housing finance and public capital funding streams.

Housing finance schemes, which are currently available have little incremental effect on the national housing stock as these are either exclusively packaged for a few targeted groups or are priced beyond the reach of the poor.

Under Zim-Asset, Government intends to reduce housing backlog through the provision of serviced land, strengthen public private partnerships and adoption and adaptation of new building technology.

The Government will also strengthen community based housing organisations, strengthen micro-housing finance institutions and adopt densification (vertical expansion).

In a trading update for three months to March 31, CBZ said total income increased by 14 percent to $39,2 million.

Net interest income contributed 57 percent to total income, down from 60 percent in the same period last year while 36 percent came from non-funded income.

Profit after tax was 5,2 percent up to $6,1 million. All group’s units are adequately capitalised, above the prescribed minimum thresholds. Shareholders approved all resolutions on the agenda.

Source : The Herald